I know, life settlements have a bad name, but using them for charitable donations is a laudable goal.

Dr. Bob stands in the empty shell of a huge room. He is explaining to touring visitors that they need $48 million to finish the room into a much needed children’s emergency room.

He shared a story about his first day of his job at this hospital. A little girl came into the old emergency room with her foot all but severed from her leg. Another hospital said they could not save it, but checked with his hospital to see if they could help. He swore to the parents of this little girl that he would save it.

Years later he watched as the little girl ran across the room with full feeling and use of her foot. She had no limp at all. His hospital is the only level one trauma center in the state. He knows there is much more to do and he is on a mission to save lives and the quality of life of our precious children.

Dr. Bob’s father, Don, is proud of his son’s accomplishments and has donated large sums of money to the hospital in the past. Don is retiring from his own medical practice because of heart trouble. He is 70 years old and sick.

Don wished he could do more to help his son realize his dream of building that unit. Don is about to let a $4 million term life policy lapse because he and his partner have sold their medical practice and they do not need it anymore. Don is unaware the policy is convertible into a permanent policy and that it is worth $1.15 million to investors because of his age and medical condition.

He does not know he could gift over $1 million to his son’s program to help the kids and honor his son. And he is unaware that he has the option of gifting that converted policy into the hospital foundation and contributing tax deductible cash to the charity each year to pay the annual policy premiums and create a $4 million endowment in his son’s name instead.

If only some informed agent could get to him before he throws all that money in the trash. And that is why I want you to read this article. There are thousands of real policies sitting in drawers that could do much good in the world. And you have the skills to help charities find these policies.

Imagine all the old life policies, big and small, sitting in drawers across America that will never get used. These are unused and unappreciated assets that were once useful to families and businesses but now sit collecting dust.

Some are term policies and some have cash. Some have cash, but most of the cash has been borrowed. Give it some thought and you will recall many different situations that you have seen in your career to add to this list of forgotten and unwanted policies.

The cash in the policies is valuable, but most of us do not think about the life settlement value. I know, life settlements have a bad name, but using them for charitable donations is a laudable goal.
Charities that keep the policies in force instead of selling them pay no income tax on the gains. And in the latter case there is no fat cat investor making big profits off someone else’s demise. It just makes more sense and feels better.

What if passionate volunteers were told to look for these nuggets of gold buried in their drawers? What if the charities and their board members were simply told to ask their members to actively look for old unused policies sitting in their drawers?

What if their web sites and newsletters consistently asked for members to look for these policies? What if those board members, and the charity’s staff, started digging through their own desk drawers and asked their parents about any old policies sitting, unused, in the dark ? Think of the money that could be discovered and put to good use.

Now, what if thousands of life insurance agents spread the word across America that this money is being neglected? What if we donated our time to review those policies and found creative ways to breathe new life into them?

And then what if you all started sending me your success stories and we published the results of that campaign to the press and shined a big spot light on how life insurance agents are helping charities all across America?

That is my vision and I would love your help in getting this done. Will you be part of this project to spread the word about digging for gold in desk drawers?

Contact me and I will put you on a list of volunteers and keep you informed of our progress. I will also share the creative strategies of what we can do with these policies to put them to better use; be it a term conversion or a life settlement type solution. Or even a replacement of an old cash value policy into a better design or cost of insurance.

I can also point you to an MGA/IMO life agency that will do the foot work on all of this for us for free.

By the way, Bob’s dad, and his policy, is a fiction. However, the real Bob goes by a different name and heads up the trauma unit at Phoenix Children’s Hospital.

I stood in that large unfinished room last night and listened to his story with awe and a flush of emotion as he talked about that little girl. And then I listened to another doctor in their new heart ward talking about actually replacing a new born baby’s heart at birth so they could live. This is truly amazing stuff.

Go out and get involved with these charities and do good works. You may start with a profit motive in mind to convert life policies and to make a commission. That is all fine and good, but I will guarantee you will soon find yourself getting excited about what you can do to help people lead better lives. It is infectious.

I look forward to meeting with you and sharing this exciting venture. I hope to hear from you soon.

About the Author

Ken is a CPA, CFP, CLU, ChFC. He is past President of the Arizona CPA Society Phoenix Chapter, and past President of the Greater Phoenix Institute of Certified Financial Planners.He teaches two 8 hour CPE courses for CPA's on life insurance and annuities.
Ken specializes in designing and presen... More